11 February 2013

Obama Prepares To Screw His Base

Young people reelected the president. Now, they get to pay disproportionately for ObamaCare.

By Ben Smith

President
Obama's enemies often accuse him, in the starkest political terms, of
crudely acting to shift resources toward his political base:
green-energy donors, single women, Latinos, African-Americans.

But
the next 12 months are likely to reveal the opposite. Imminent elements
of Obama's grandest policy move, the health-care overhaul known as
ObamaCare, are calculated to screw his most passionate supporters and to
transfer wealth to his worst enemies.

The passionate supporters
are the youth, who voted for him by a margin of 60% to 36%, according to
exit poll samples of people 29 and under. His enemies are the elderly:
Mitt Romney won 56% of the votes from people 65 and over. And while one
of ObamaCare's earliest provisions was a boon to the young, allowing
them to stay on their parents' insurance through the age of 26, what
follows may come as an unpleasant surprise to many of the president's
supporters. The provisions required to make any kind of health insurance
plan work — not just ObamaCare, but really any plan of its sort —
require healthy young people to pay more in health insurance than they
consume in services, while the elderly (saved by Sarah "Death Panels"
Palin from any serious attempt to ration expensive and often futile
end-of-life care) consume far more than they pay in. There is always a
push and pull, however, and this year will be spent laying plans to
shift the burden further toward the young.

State and federal
officials and the health-care industry are currently preparing to
implement two specific ObamaCare provisions taking effect on Jan. 1,
2014, acting on this politically perverse principle of shifting
resources from your supporters to your opponents. The first is the
individual mandate, which aims to force the young, childless, and
healthy — "Young Invincibles," as they are said to think of themselves —
to buy health insurance, even if they think (and even perhaps make a
rational, if risky, bet) that they don't need it.

The second is a
lesser-known policy to limit the practices of charging different
premiums to different ages, known as age-rating. Many states currently
set a limit on this difference, often mandating that an old person
shouldn't pay a premium more than five times a younger person's, even if
she's expected to use more than five times as much health care. The
ObamaCare provision kicking in next Jan. 1 would reduce that ratio to
three-to-one, essentially limiting what the elderly pay in part by
forcing young people to carry a larger share of the total cost of
national health care.

The raw politics aside, there is certainly a
reasonable case for sparing the elderly exorbitant premiums, and for
forcing young men to buy insurance before they wreck their motorcycles. The Health Care Blog's Maggie Mahar points out
that a 60-year-old unable to buy insurance is in a far worse position
than a 27-year-old forced to pay a bit more, though she and others worry
that the costs will keep some young people from buying care for
themselves and their children. (There are also provisions yet to come
that benefit the young; subsidies for people buying insurance on the
individual market are expected to be disproportionately used by younger
people.)

Meanwhile the AARP, the implacable lobby for retired
people, has been energetically making the case that the young should pay
up.

In an interview, AARP legislative policy director David
Certner didn't contest the suggestion that young people would be forced
to pay more, but argued that it was a matter of the common good, not
simply the interest of his constituents.

First of all, he told
BuzzFeed, the young may not be paying their fair share: "Younger people
pay less in taxes than they do when they're middle aged and have higher
incomes."

And second, they'll be old someday too:

"It's
about having a big insurance pool because everyone benefits from it,"
Certner said. "If a younger, healthier person is spending a little more
now, it's OK because at some point they're going to be a less healthy,
older person too."

This is a reasonable policy argument, though
it's worth noting that every interest group argues its interests are
identical to the common good. Cutting my taxes will stimulate the
economy; spending on defense technologies will protect the homeland;
maintaining my work rules will protect students; etc.

But politics is about power and resources, not about policy and morality. AARP has no real case to make there. The current young supported Obama; and the current old opposed him.

The
near-total silence on this issue is a mark of a class that is either
utterly selfless (hard to believe, honestly) or, as usual, singularly
bad at seeing and defending its interests.

And so this vast
transfer or resources from young to old — just the latest in a long line
of these transfers — hasn't been discussed much because it is totally
uncontroversial. Compare it to the footnote that has at times turned
into a national obsession: religious conservatives' objection to a
provision favoring the young (and possibly saving money), the new
requirement for private coverage of contraception.

The voices
raised against age rating and other policies tend not to be the most
credible. They are, first, conservatives who simply see this as another
wedge against Obama and his new policy. Outlandish rhetoric about the
health-care law's threat to American freedom can make it hard for
members of either party to consider policy on the merits; and so the
proposal from Georgia Rep. Phil Gingrey (in the news of late for
theorizing that " tense and uptight" women, like, say, rape victims, are
less likely to conceive children) to leave age discount decisions with
the states is generally considered as gimmicky as its name: The Liberty
Act. (It's short for "Letting Insurance Benefit Everyone Regardless of
Their Youth.")

The other main source of criticism of age rating
has been the insurance industry, which worries that it will be blamed
for rising premiums and that it will find it hard to sign young people
up to expensive plans. Its main lobbying group, America's Health
Insurance Plans, has been quietly briefing reporters on the threat and
circulating a catchy infographic
suggesting that age rating will be a major threat to the success of
ObamaCare — not just to the industry bottom lines. And insurers told the conservative American Action forum that small employers' premiums for healthy people 27 and under are
likely to increase an average of 169%, while less-healthy people 55 and
older would see their costs decrease less than 25% (a smaller
percentage, of course, of a much larger sum).

If you don't
consider ultra-conservative Republicans and the insurance industry
particularly credible sources in this argument, though, look to a young
persons' lobby, such as it is. Young Invincibles, a liberal group best
known for supporting the Affordable Care Act (and filing an amicus brief in support of the individual mandate), wrote to the Department of Health and Human Services last Dec. 26 rather meekly suggesting that age rating be watered down a bit.

"While
young people have both a societal and individual interest in ensuring
that older adults can afford to purchase coverage, no one benefits if
young people who are not protected by this cushion do not buy on
exchanges," the group wrote.

So attack Obama on whatever grounds
you want, and accuse him, if you like, of rewarding his friends and
punishing his enemies. But that charge, true to some degree of most
politicians, may be less true of this one than any other in recent
memory. The central question, as Mahar notes, is, "How do we choose
between children and their grandparents?" In any normal political
calculation, that answer would be clear: You choose the ones who voted
for you.